State Coalition leading charge to high living cost

Government-controlled prices are climbing faster in Melbourne than anywhere else in the country, according to a Deutsche Bank analysis tracking inflation.

The bank divided price rises in the latest inflation figures into ''government'' and ''private'' categories.

The government category includes utility charges, public transport fares, property rates and charges and motor vehicle registration. Most of the rest are regarded as private.

The bank says that although not everything in the ''government'' category is run by the government, it usually has a role in setting those prices.

Melbourne government sector prices climbed 6.7 per cent throughout 2013 while private sector prices climbed 1.1 per cent. The gap is the widest in Australia.

Deutsche Bank economist Adam Boyton said the really big hikes, in property rates and water and sewage charges, took place in the middle of the year. ''Victoria is an extreme case, but all over we are seeing governments everywhere keener to raise charges than they used to be,'' he said.

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''Fifteen years ago public policy was about more about making services more efficient, lowering costs and handing the benefit to consumers. Now it's more about finding something to do and putting up charges to fund it.

''Look at electricity. They are able to give us a whole bunch of reason why prices have risen for the past few years - invest more in facilities and so on. What they haven't been doing is investigating in cheaper methods of meeting demand and making the market more competitive.''

Melbourne's overall consumer price index climbed 2.5 per cent in the 12 months to December, the highest rate of any Australian city, along with Sydney's. But Sydney's government sector prices climbed much more slowly and private sector prices more aggressively.

In December Victorian Treasurer Michael O'Brien announced a near doubling of weekend fares on public transport, a widened road congestion tax and an increase in the tax on inner-city parking. The moves helped keep the government on track to deliver a modest budget surplus in May.

A government spokesman said the Coalition had been working hard to reduce costs.

''What continues to affect Victorians is the $1.8 million a day water users are paying for Labor's oversized, overpriced and unused desalination plant. Victorians are also being slugged for Labor's carbon tax, which has increased electricity prices by more than 10 per cent, further impacting the cost of living,'' he said.